Yellen Sees a Bubble… Again


We can’t blame the Federal Reserve for trying… It was July 16, 2014 when Federal Reserve Chairwoman Janet Yellen warned of stretched valuation concerns in the biotechnology space.

The warning was wrong, though.

She never accounted for the 10,000 baby boomers retiring by the day, new healthcare or treatment options.

In the months that followed the pitiful warning, the closely watched NASDAQ Biotechnology Index rallied 48%.

Now the Fed warns that commercial real estate is in a bubble, earning herself quite the reputation for stoking bubble fears. So far, her bubble fears for the S&P 500, biotech, and social media haven’t been too… well, good.

But I can’t blame her for trying. It’s a tough job nailing bubbles these days.

She now believes, per the policy report to Congress that, “valuation pressures in commercial real estate are rising as commercial property prices continue to increase rapidly,” as reported by The Wall Street Journal.

But as I believe, we’re far from frothy bubble-like conditions in commercial real estate. With a great deal of capital inflow likely from domestic and foreign investors, which we’ve long talked about, I don’t believe we need to concern ourselves with Fed fears of another bubble.

I’m not the only one that thinks so. Several economists don’t believe it either.